Starting this weekend, many states around the country will go on sales-tax holiday in an effort to ease the consumer burden of back-to-school shopping. Forgoing the 6 percent to 10 percent sales tax on items like clothing, school supplies and select electronics can mean big savings for parents, but it also represents an opportunity for small businesses.
"We encourage our clients to take advantage of not having to pay tax," says Gary Milkwick, CPA and vice president of 1800Accountant.com, a business services and accounting firm specializing in small businesses. "Just like individuals, businesses have the opportunity to save money. If you need to replace your computers, now's the time."
What’s more, small merchants have the chance to make money from the sales-tax exemptions, says Milkwick. Retailers can increase sales by promoting their products and holding special events that coincide with the tax holiday.
Related: Where Back-to-School Shopping Dollars Are Going (Infographic)
Where can you take advantage? The following 10 states, with details provided by 1800Accountant.com, will exempt select back-to-school items from sales taxes this weekend:
Alabama
Dates: Aug. 3-4
Includes: School supplies, computers and some clothing
Arkansas
Dates: Aug. 3-4
Includes: Clothing and certain school supplies
Florida
Dates: Aug. 2-4
Includes: School supplies, some clothing, and some digital items costing less than $750 such as tablets and e-readers, laptops and desktop computers, and modems and routers
Louisiana
Dates: Aug. 2-3
Includes: Most goods sold for non-business use, with a cap of $2,500
Missouri
Dates: Aug. 2-4
Includes: Clothing, school supplies and computers
New Mexico
Dates: Aug. 2-4
Includes: Some clothing, school supplies and computers
North Carolina
Dates: Aug. 2-4
Includes: Some clothing, school supplies and computers
Oklahoma
Dates: Aug. 2-4
Includes: Clothing and shoes
Tennessee
Dates: Aug. 2-4
Includes: Clothing, shoes, school supplies and computers
Virginia
Dates: Aug. 2-4
Includes: Clothing and school supplies
Five additional states go on sales-tax holiday next week. They are Connecticut (Aug. 18-24), Georgia (Aug. 9-10), Maryland (Aug. 11-17), Massachusetts (Aug. 10-11) and Texas (Aug. 16-18).
Even if small retailers don't intend to capitalize on the tax breaks themselves, Milkwick cautions owners to be aware of their state's rules and comply with the holiday. That may require updating automatic payment processes to ensure that they do not collect taxes on the non-tax days.